Krugman: Spend Now, Save Later

[mrstickball]

axt113 said:

mrstickball said:

Final-Fan said:

mrstickball said:
Could you provide examples in the US that the private market has had periodic catastrophe

Seriously?

Please quote the rest of my statement.

Please provide a few examples that government intervention in the private sector was the only way out of the mess.

The great Depression, nothing the private sector could do would have been big enough, the gear up for the war was led by the government, and it was that war footing that pulled us out.

Ah, but as soon as the war ended, GDP dropped 25% in a matter of months.

Had Bretton Woods not of increased American exports by 300% in a year, I believe that we wouldn't be having this conversation, as exports helped ensure we had a glut of jobs after WW2.

I'd also mention that the reasons behind the Great Depression were mostly government related...Smoot-Hawley and the federal reserve's monetary policy caused wealth to be destroyed...Not a great sign of governments being the greatest when it comes to keeping the economy afloat.

I digress, the Great Depression is one of, if not the only, examples of government spending helping us get out of tough times. However, again, I will cite the correlation of the rapid rise of American exports after WW2 as being a huge factor in saving us, post-WW2, just like how Smoot-Hawley destroyed our economy, by diminishing exports by 66% over a 3 year period.